Among the post office savings schemes offered by India Post, Sukanya Samriddhi Account offers one of the highest interest rates when compared to many other schemes. Sukanya Samriddhi Yojana (SSY) is one of the 9 small saving investment schemes, run under the Ministry of Communications.
An Sukanya Samriddhi Yojana account can be opened for a girl child before she turns 10 years. In order to open an Sukanya Samriddhi Yojana account for a girl child, a minimum of Rs 1,000 is required to be deposited. A maximum of Rs 1.5 lakh can be deposited in a financial year, under this scheme. The interest rate on the deposit is revised quarterly by the government. Note that this interest is compounded, and credited annually.
Other savings schemes that are offered include Post Office Monthly Income Scheme Account (MIS), 5-Year Post Office Recurring Deposit Account (RD), 15 year Public Provident Fund Account (PPF), Senior Citizen Savings Scheme (SCSS), National Savings Certificates (NSC), Kisan Vikas Patra (KVP), and Post Office Time Deposit Account (TD), and Post Office Savings Account.
Here’s everything you need to know about the scheme:
Documents required:
- SSY Account Opening Form
- Birth Certificate of the girl child (mandatory)
- Identity proof (as per RBI KYC guidelines)
- Residence proof (as per RBI KYC guidelines)
5 ways to benefit from the Sukanya Samriddhi scheme;
1. Interest: Sukanya Samriddhi Yojana scheme currently offers an interest rate of 8.4 per cent per annum, which is the second-highest interest rate among all small savings schemes offered under the post office schemes. The interest rate is declared by the Government every year for the current Financial Year, which is compounded and credited yearly.
2. Tax benefits: The scheme offers Income Tax benefits as well. As per the I-T Act, income tax is exempted from the contribution made to this account under Section 80C. The scheme offers tax exemption on the interest and also at the time of withdrawal. Since this scheme falls under EEE (exempt, exempt, exempt), the contribution made, the interest income and maturity proceeds are all tax-exempt.
3. Withdrawal: From the date of opening of the account, the scheme matures after 21 years. However, withdrawal can be made on certain occasions such as during the marriage of the girl child, the amount can be withdrawn.
Also, if funds are required for higher education, premature withdrawal can be made on attaining the age of 18 years by the girl child. Premature withdrawal is limited to 50 per cent of the balance that was at the end of the preceding financial year.
Deposits can be made to this account till the account holder completes 14 years from the date of opening of the account, even though maturity is 21 years from the date of opening of the account.
4. Maturity proceeds: The maturity proceeds are paid to the girl child holding the account, once the account matures. The account balance along with accrued interest at the time of maturity is paid directly to the account holder. The interest is paid even after maturity, unlike other financial schemes which makes this scheme even more popular among risk-averse investors.
So, under this Sukanya Samriddhi Yojana scheme, if the investor does not close the account after maturity, the interest will be paid to the account holder till the final closure of the account.
5. Tax benefits: Income tax is exempted from the contribution made to this account under Section 80 C of the Income Tax Act. This scheme offers tax exemption on the interest and also at the time of withdrawal.
6. Flexibility: Sukanya Samriddhi Yojana account offers a lot of flexibility to the investors. The account can be opened with a minimum deposit of just Rs 1,000, which can be continued with any amount in multiples of Rs 100. Every Financial Year, one needs to deposit a minimum of just Rs 1,000 needs to keep the account operative.
As notified by the government, the interest is compounded annually with the option for monthly interest pay-outs to be calculated on balance in completed thousands. It is worth mentioning that irregular payment, revival of account attracts a penalty of Rs 50 per year along with the minimum specified amount per year.
